UK retail group Ryland decided three years ago to withdraw from mass-market cars to focus on luxury vehicles. For its investors, this was an inspired move.
In those three years, shares in Ryland have gained almost 300 percent.
This is the biggest success story in the segment, but not an anomaly. Share price gains for the nine companies monitored here averaged 131 percent over three years.
Rylands revenue declined by nearly 20 percent to £568 million (E809 million) in the last three years as it gave up selling cars for Vauxhall, Fiat, Ford, Renault and DAF trucks. But as its sales of BMWs, Jaguars and Mercedes-Benz increased, Ryland went from a loss of nearly £5 million in 2000 to a profit before tax of £6 million in 2002, helping Ryland pay back a good chunk of its debt.
To be fair, Rylands investor return is not only the result of a successful strategy. The share price has been buoyed by speculation about Rylands future ownership.
Management wants to buy out investors and take the company private in a bid to fend off Pendragon, a competitor who has acquired a 30 percent stake.
Bilia, a Swedish retailer, returned nearly 24 percent over one year, compared with an average loss of 2 percent for the industry. Bilias emphasis on servicing and selling parts and accessories high-margin activities shielded it from a weakening European car market.
Meanwhile, Bilia has expanded its business in metropolitan areas to achieve economies of scale. The retail group represents the Volvo, Renault and Ford in Sweden.
To focus on its passenger-car business, Bilia will sell to Volvo AB, its largest shareholder, its construction, truck and bus operations. Volvo will no longer hold 43 percent of the new, leaner Bilia.